After reading "Thinking Fast and Slow", I've always wanted to learn more about Annie Duke and her rise to glory through probabilities in poker. Being a (very very very rookie) poker player myself, I thought it best to cover Annie Duke's "Thinking In Bets". Annie takes a shot at explaining how probability thinking and cognitive biases tend to hang out together.

Chapter 1 - Life is Poker, Not Chess

The book covers how chess and poker are fundamentally different. In chess, there are strict rule adherence with a specified set of outcomes that can happen due to the playing field, pieces to be chosen, and the player. She relies on John Von Neumann's statement that game theory is the theory of games that has limited insight into the true conditions that is occurring related to the outcomes to occur.

She reasons that our lives will be better guided with decisions when all the things are not clear when we change our belief that life is a game of poker, with many outcomes that cannot be predicted, instead of chess where every outcome can be computed.

Chapter 2 - Wanna Bet?

Annie challenges our believes that everything is betting. Annie makes a statement that we'll have more points in the future where we will be wrong, a lot. The point here being that if we have a lot of wrongs in our future, it helps us to shift our thinking of decisions as right or wrong to decisions being just a bet.

Annie challenges us that our belief systems are what we make our bets on. If we bet to move to a new city for a new job, this bet is taken as a decision.

  • Our belief systems have shifted from our primitive roots of seeing is believing (it's safer to have a false-negative) to being more lazy and believing what others have seen (it's safer to have false-positives). The example she gives in the past days, if we hear some plants shaking, it's best to believe it's a lion. This situation doesn't exist anymore, which is why we believe things to be true when in fact they are false.

Some examples she shares are dog years being 7 to 1 for humans or balding occurring from our maternal side. Both of these beliefs are false, yet we believe them to be true? Why? We don't have the type 2 power to apply to researching all these beliefs, so we take the word as truth.

There is a point Annie made about scientists declaring animals as being extinct. Then some later times we find the animal again. This could be selection bias by assuming we have seen all the choices, when in fact we have not. This could also be a fluke.

Annie also pulls the curtain from how our belief systems are formed. We think they are one from an idea being planted, to then challenging it ourselves to be true or false. This is not how they are formed now - they are formed by hearing a thing, believing it, and then taking it as truth without challenging the beliefs.

Chapter 3 - Bet to Learn: Fielding the Unfolding Future

Annie talks about someone who she learned from early on in her poker days - Nick the Greek. Nick would think that his outcomes were all based on luck, not on skill. Annie learned this by his many failures and stating when he failed, it was luck, when he won, it was skill.

We tend to think there is a line between beliefs and luck; some people see this, others do not. This is why people tend to learn from failures and adjust versus just thinking it was blind luck.

Uncertainty with results, as in the rat study where variable rewards are given, makes it hard to know the true origin of successful signals. Dealing with uncertainty before and judging is not the same as judging after when the uncertainty is known.

In poker, bets make it hard to judge the outcomes when we do not see the cards. In this way, poker is more like life because the unknowns are up front. This is mainly due to hindsight bias.

If given the same incomes repeatedly, would the person giving the effort be consistently successful? That is how you truly judge the success of the people under question. Was it a fluke or can it be done consistently? That is the question you want to know with bets.

The author also points out that people watching is a way to learn from others for free. She states on the poker table, watching others play cards and make bets is a way to learn on how to make bets without having to pay money.

Annie makes a mention to status anxiety - in that we compare to others that are in like statuses and feel envy toward them. This will hamper learning. Annie also points out that there is a german word for when we are happy for others misfortune, called Schadenfreude. This is a condition where people get happy when they think others failure is due to skill, and their wins only from luck.

Chapter 4 - The Buddy System

Annie shares a story about Letterman having some drama queen on his show, who always found ways to get into issues with everyone. Letterman then noted that quote, 'if everyone is an asshole, maybe you are the asshole'. While Letterman stated the ultimate objective truth, the error was that he did not invite his guest into this objective truthseeking. This had an adverse effect, in which the lesson was the other person must be willing to engage in this objective learning mindset. Without this willingness, the other will become defensive, like Letterman's guest on his night show. Apparently she did not like Letterman's truth!

Annie told of her friend Nick the Greek. Nick was in Annie's early poker learning groups. Annie learned from Nick that he had one flaw that helped her learn: he would state his wins were due to skill, and his loses were due to luck. He did not care to see the objective truth basd on his beliefs. We believe things that we do not challenge, poker makes people learn these things because it costs money to lose.

Annie states that having a group with tenets to drive to the objective truth is a must have in a buddy system group. She quotes Dr. Bob with AA, which leaned heavily on the buddy system. This buddy system helps drive home our objective truths together. We can do better with the help of others. This does not automatically turn out that way, if the tenets are not aimed in the effort to defeat bias.

Chapter 5 - Dissent to Win

The main point here is about Robert Merton, in his 1973 paper that talks about an acryonym for kudos that helps groups comes to objective truths.

Per the paper:

c - communism = data belongs to the group.

u - universalism = apply universal claims to evidence, regardless of where they come from.

d - disinterestedness - vigilance against potential conflicts that can influence the groups evaluation.

os - organized skepticism = discussion among the group to encourage engagement and dissent.

Any group needs to follow these ideals above in their charter.

A great point here is 'dont shoot the messanger', because hearing bad news we blame those who give it, but they give it to protect the group. When we have a negative view towards the person giving the message, we may miss a lesson that could be learned. If we trust the messenger, and the news is good in our eyes but wrong objectively, that is bad as well.

Chapter 6 - Adventures in Mental Time Travel

Annie tells the version that Jerry Seinfeld uses for his antics regarding his future decisions by stating, 'that is a morning Jerry's problem', which is how Jerry puts his future regrets out of his current set of worries. Annie then quotes a 10-10-10 process to help think ahead by asking, "what are the consequences of each of my options in ten minutes? Ten months? Ten years?". These type of questions allow us to time travel and get us to see things from 'morning jerry' point of view.

Annie makes two main claims in this chapter: you should always conduct working backwards, which she calls 'backcasting'. This idea has several claims in other books like 7 habits of highly effective people, which one is 'begin with the end in mind. Annie tells us that this backcasting is a tool to get us from a place of success and the decision branches it took to get there.

Annie then clarifies the second rule of pre-mortems. Pre-mortems are working from where you are now to success, by attempting to traverse the decision tree branches to the points of failure. By doing this, she claims, we can eliminate those decisions altogether.

By using these two tools, Annie claims we can increase our probabilities for getting to successful outcomes.

By combining these pre-mortems and beginning with the end in mind, we can create more successes in the long run with the ever limited time we have.

One great idea Annie shares about pre-mortems - it opens the floor of the naysayers to cast their fears and concerns ahead of time, with the added bonus that when time comes closer to the time of execution, the naysayers have cast their warnings. The naysayers have been given their time to speak up in an open and non-punishing format.

The call here with these tools are to see the world in a more objective lens.

Key Takeaways

  • Humans tend to think in binary type outcomes, when in reality it's a scale of available choices.
  • When probabilities are evaluated by the outcome relative to the decision, Annie calls this 'resulting'.
  • Resulting is when we try to put together cause and correlation.
  • Mankind has a long list of biases we all hold. We all think we can be objective, but we inheritently go subjectively. We should be aware of this and aim to be objective as to the best extent we can.
  • There are a lot of possibilities between right and wrong. When predictions happen, we must just reason that the other outcomes happened over the predictions. This is very possible.